As December begins with a turbulent start in the cryptocurrency realm, emerging trends are stirring expectations of increased market volatility. Despite substantial Bitcoin sell-offs, the trend of declining exchange supply persists. With the end of 2025 quickly approaching, the year ahead promises unexpected developments in the crypto sector. Here’s a look at noteworthy trends and essential insights that demand attention.
What Is Triggering Bitcoin’s Supply Descent?
Despite Bitcoin nearing its daily highs, its value remains below the $90,000 mark. Ahead of the U.S. market opening, attention focuses on potential shifts in ETF trading volumes, possibly influenced by the Vanguard effect. Intriguingly, even amid significant sales and downturns, the amount of BTC on exchanges continues to decline, with the current supply reduced to 1.8 million units.
This shrinking supply on exchanges is underscored by the fact that Strategy’s 650,000 BTC reserves now correspond to more than 33% of all exchange reserves. This supply, which previously exceeded 3 million, has decreased precipitously over time.
How Is the Crypto Market Cycle Evolving?
The current market cycle diverges notably from previous patterns. As Quinten, a pseudonymous analyst, highlights, the market structure has transformed significantly since earlier cycles.
“Everyone expects a classic altseason like in 2017 or 2021. However, the entire market structure has changed. In 2017, a few hundred coins competed for capital. By 2021, there were thousands. Now, in 2025, there are over 11 million tokens, memecoins, and worthless experiments. The days of ‘everything rises in a bull market’ are gone. This is the toughest cycle in crypto history. You need a portfolio of real projects with genuine demand, or you will disappear.”
The following key developments shed light on the current landscape:
- Vanguard has shifted its stance, now providing crypto ETFs.
- Stricter regulations on stablecoins were reinforced by China’s central bank.
- Japan has implemented a 20% tax rate on cryptocurrencies.
- The GENIUS Act framework will oversee stablecoin issuers through the FDIC.
- Ripple received approval for expansion in Singapore from MAS.
- Kalshi has begun offering event contracts via the Solana network.
- Sony Bank intends to introduce USD stablecoins in the U.S. by FY 2026.
- The Fed announced a significant policy change.
Lark Davis, a seasoned observer, noticed another major market intervention.
“WOW!! The Fed injected $13.5 billion into the market as an overnight repo operation. This is one of the BIGGEST liquidity injections since COVID and exceeds any overnight repo amount seen during the dotcom period.”
The evolving landscape in the cryptocurrency sector presents both challenges and opportunities, keeping market participants on high alert as they navigate these uncertain waters.
